Having overspent dramatically on celebrity spokespeople and high-profile stadium naming deals just as the crypto winter was starting to blow across the industry, crypto exchanges have backed off of celebrity spokespeople urging to get “in on” an investment consumers are now very wary of at best.
Read more: Crypto Makes a Play for the Mainstream with Star-Studded Super Bowl Ads
How far have exchanges backed off?
If February, the Super Bowl-happy industry spent $85 million on TV ads, according to television advertising measurement firm ISpot.tv, Bloomberg reported.
That was led by exchanges like FTX, Coinbase, and Crypto.com, which shelled out $6.5 million per 30-second ad during the big game — to say nothing of $135 million to name the Miami Heat’s stadium FTX Arena for 19 years, a reported $192 million to make Coinbase the “exclusive cryptocurrency platform partner” of the NBA and WNBA, and a staggering $700 million to turn the NBA’s LA Lakers’ Staples Arena into the Crypto.com Arena for 20 years.
See here: Crypto.com Closes $700M Deal for Naming Rights to Staples Center in LA
In July? Crypto companies spent $36,000 on TV ads, ISpot.tv said. (Although using the plural of “advertisement” is pure speculation.)
While crypto ads obviously peaked during the Super Bowl, the drop was very quick: ISpot.tv said the ad bill was $18 million in March, $6 million in April, $8 million in May and just $3 million in June, before essentially zeroing out in July.
Also read: Super Bowl Ads Failed to Draw New Crypto Investors
Nor is likely to come back anytime soon, Eric Haggstrom, director of business intelligence at industry research form Advertiser Perceptions, told Bloomberg.
“Ad sellers shouldn’t expect growth in this vertical the remainder of the year due to the crash in crypto valuations and emerging allegations of fraud among companies in the crypto market,” he said. “Crypto has been a boom-and-bust industry since its inception, and advertising budgets will follow the same trajectory.”
Fortune Favors the Wise
That could have something to do with that 30% trading volume drop and $1.1 billion loss Coinbase reported in Q2.
See more: Coinbase Upbeat Despite $1.1B Loss, as Shares Sink 10%
Or the hundreds of millions of dollars FTX CEO Sam Bankman-Fried is spending to prop up and acquire struggling crypto firms for the good of the industry and/or his bottom line, depending on who’s version of the truth you believe.
Read more: The Growing Ambitions of Sam Bankman-Fried, Crypto’s Would-Be King
Which means you probably won’t be seeing NFL legend turned FTX equity owner/spokesman Tom Brady and his wife, supermodel/ FTX spokeswoman Gisele Bündchen taking a flamethrower to an ice sculpture by the pool or texting his friends the plumber and dog walker to get “in on” crypto — in what Ad Age described as an attempt to “democratize the crypto category and make crypto trading accessible to everyone.”
Nor actor Matt Damon saying, “Fortune favors the brave” as he compares crypto to the invention of the airplane and space flight.
Although to be fair, Damon is probably more than happy not to be getting work on a contract that saw him widely mocked for months by crypto investors, like the one in June that Hollywood publication Variety noted reminded fans, “If you bought $1,000 of bitcoin the day Matt Damon’s “Fortune favors the brave!” commercial came out, it would now be worth $375.”
If you bought $1,000 of bitcoin the day Matt Damon’s “Fortune favors the brave!” commercial came out, it would now be worth $375 pic.twitter.com/rp5IdjBD3m
— 🦀 Jon 🦀 Schwarz 🦀 (@schwarz) June 13, 2022
That’s to say nothing of being broadly criticized for representing a risky investment like crypto without, detractors said, being clear about how risky investing in digital assets can be.
“This is real money that people are investing,” Giovanni Compiani, a University of Chicago marketing professor, told The New York Times in May. “Those who promote it should be more upfront about the potential downsides.”
That’s a problem with crypto investing in general, economist David Evans, chairman of Global Economics Group, told PYMNTS earlier this month while calling for far tougher regulation of the stablecoin segment of the cryptocurrency ecosystem that enables the trading he likens to gambling.
Read more: Economist: Tougher Regulation Needed While Stablecoins Make Their Case for Innovation
“The fact of the matter is the major use case for cryptocurrencies today is speculation,” Evans said. “And that speculation is increasingly hype-driven, celebrity-driven.”
Would-be crypto buyers, Evans said, “shouldn’t have the exchanges hyping things in the way that they’ve been currently doing, in my humble view.”
For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More